Rushing to save tax? Look beyond insurance at other options too

Rushing to save tax? Look beyond insurance at other options too

Mar 19, 2013, 12.03 PM IST

Preeti Kulkarni, ET Bureau

Make investments only after evaluating the 'return on investment' scenario , including potential tax gains , ET says

You hardly have two weeks to finalise your tax saving plan before the deadline on March 31. If financial advisors are to be believed, many individuals think of tax planning only in the last two weeks of the month of March. They also quickly add that these individuals often fall for unscrupulous tactics of their insurance agents or personal bankers.

It is only much later that they realise the folly of buying wrong products. "Many people look at such investments merely as tax-saving tools. Also, as they have very little time to evaluate the product features , they are bound to make mistakes. The right approach is to make investments that are suitable for you, after you evaluate them from a return on investment perspective, including the potential tax benefits," says Amarpal Chadha, tax partner with consultancy major Ernst & Young.

In other words, the obsession with preventing the tax dent on your savings could, in fact, cause long-term harm to your finances. If you are in this group, here are some tips that may help to avoid some common mistakes this year.